Oregon Potato Industry Faces Rising Costs and Export Risks Amid U.S. Tariffs

Eastern Oregon’s potato industry is on edge as the highest U.S. import tariff rate in nearly a century ripples through global markets, raising concerns of potentially higher farming costs and reduced export opportunities. While growers haven’t yet felt the full hit on potato export sales, concerns are mounting that fertilizer and chemical prices could spike when the spring planting begins next year. 

The Trump administration in early August started imposing a series of new tariffs against nearly 80 countries and the European Union. The average U.S. effective tariff rate has risen to its highest level since 1933, reaching 18.6% as of Aug. 7, according to the Yale Budget Lab. Industry leaders warn the new tariffs could lead to higher costs for fertilizer and equipment for growers and processors, while economists warn of increased competition if foreign buyers start sourcing from other countries because of the higher tariffs. 

U.S. Average Effective Tariff Rate (2021-2025)

Between 2021 and 2024, the U.S. average effective tariff rate stayed between around 2% and 3%. Then, it jumped to more than 18% as of Aug. 7, 2025.

Gary Roth is the executive director of the Oregon Potato Commission, a potato grower-funded organization that represents the industry in legislative policy and trade development. Roth said more than half of Oregon’s potatoes are exported abroad, but noted growers have felt “little to no” negative financial effects from the recent tariff hikes on their sales to potato processors. He also noted growers have not yet seen any negative financial effect on the fertilizer and chemicals they use. Roth, though, cautioned that the economic outlook for the potato industry could change. 

Tariff impacts take time

Eastern Oregon potato growers might not yet feel the financial impact of the new tariffs because they bought most of their fertilizer, parts and chemicals when they planted this spring, before the hikes took effect. The financial pinch could come next year in the spring, when they purchase supplies that may cost more. 

Roth said the effect of recent tariff hikes likely will show as farmers prepare their budgets and negotiate contracts with processors for next year’s crop cycle. He warned that upcoming purchases of fertilizer, chemicals and parts might reflect higher costs due to the recent tariff hikes. 

Gary Roth, Executive Director of the Oregon Potato Commission:

"If the tariffs stay in place, I would anticipate that farmers will see increases in fertilizer cost."

State Rep. Bobby Levy, R-Echo — who represents Wallowa and Union counties and parts of Umatilla County — said fertilizer prices have become unsustainable for Eastern Oregon farmers. She said Solution 32, a fertilizer widely used on potatoes and other crops, is selling for about 85 cents a pound in Eastern Oregon. Levy, who lives on a farm in Echo, said a more sustainable cost would be 20-30 cents per pound.

Damon Runberg is the economist for Business Oregon, the state’s economic development agency. Runberg cautioned that if recent tariff hikes prompt foreign buyers to source from other countries, Oregon may lose long-standing export relationships even after tariffs are lifted.

Roth said there is additional risk to Oregon potato exports due to increased competition from Chinese potato growers.

Gary Roth:

"China is coming in with an increased supply. They’ve had a very intentional plan to increase their potato production over the last five years, and they are now competing with U.S. exports head-to-head."

Processors prepare for tariff exposure

Levy said tariffs are having the most impact on food processors. She said some Morrow County-based processors have seen parts costs increase by 5% to 15% over the past year. 

Lamb Weston has processing facilities in Hermiston and Boardman and is one of the world’s largest potato processors. Company leaders told investors on July 23 — eight days before the Trump administration announced the tariff hikes — that tariff increases are expected to add about $25 million in additional costs during the company’s 2025-26 fiscal year, which runs May 26, 2025, to May 31, 2026.

Lamb Weston in Boardman operates on Aug. 29, 2025.

A Lamb Weston spokesperson told the East Oregonian on Aug. 28 that it will address the effects of tariffs during its Sept. 30 quarterly earnings call, but did not say if the $25 million figure still reflects the company’s outlook. The spokesperson also would not discuss what mitigation steps the company is taking to offset the expected costs. 

However, the spokesperson said the recent tariffs do not affect most of the ingredients the company uses. They said many ingredients are produced in the U.S. or are exempt under existing trade agreements. But the spokesperson noted the company uses some oil from Asia, which may be subject to tariffs.

Dealing with uncertainty 

The outlook for Oregon’s potato industry remains uncertain as growers and processors brace for next year’s planting and contract cycle. Economists say higher tariffs could effect global trade, leaving Oregon to compete more directly with suppliers in China and other countries. With higher inflation in recent years already squeezing farm budgets, growers have little room to absorb additional costs. 

Gary Roth:

"Agriculture is in a pinch right now, across the board."

Economists are increasingly worried about Oregon’s ability to maintain key export markets if tariffs remain in place. Damon Runberg, an economist with Business Oregon, cautioned that once trade relationships are disrupted, they can be difficult to restore.

Damon Runberg, economist with Business Oregon:

"What happens when we sever this relationship with certain export markets? How long will it take to rebuild those connections — especially when other countries are stepping in to provide alternatives?"